Call off the soft landing. Larry Summers has joined the bandwagon.

Normally that’d be funny. Sort of. Everyone likes a lazy “famous economist as contrarian indicator” quip. But as he never tires of reminding the world, Summers was right (accidentally or not) on inflation in 2021. I think he was just lucky (or at least more lucky than right), but the fact is, Larry’s batting a thousand on his last one macro swings.

Given that, I suppose we’re compelled to upgrade already high soft landing odds in light of constructive comments Summers made on Thursday. “A soft landing probably looks more likely today than it has at any point” since 2021, he told the Economic Club of New York. Although a benign outcome isn’t assured, it’s “certainly a very real possibility.”

Naturally, Summers’s remarks were accompanied by enough caveats to preemptively absolve him of blame in the event inflation re-accelerates (or there’s a hard landing), but it was entirely fair to call his comments significant considering how critical Larry was of the policy conjuncture which many blame for exacerbating inflation on the demand side.

Data released on Thursday was soft landing-ish. The “-ish” is there to account for the fact that core inflation is still far too high. Headline inflation overshot consensus in the December CPI report, suggesting bets on a March rate cut from the Fed are premature.

Still, three-handle inflation (both on headline and core) is a lot of progress, and that progress hasn’t come at the expense of jobs. Indeed, initial claims printed just 202,000 in Thursday’s update, below estimates.

The four-week moving average is just 207,750 now, the lowest since mid-October. Simply put: That’s not indicative of a labor market on cliff’s edge.

“2023 was the impossible becoming reality: A big decrease in inflation with unemployment staying very low,” Claudia Sahm, of “Sahm Rule” fame, wrote. “Now, in 2024, we’re aiming at the impossible twice over: The soft landing.”

As ever (and as Summers noted) there’s no shortage of reasons to be wary on the inflation front. I walked through a few in “Don’t Take Disinflation For Granted.” Iran’s move to seize (“capture,” as the regime put it) an oil tanker on Thursday only heightened concerns that geopolitical tensions could ultimately resurface as an impediment to the Fed’s efforts.

“US disinflation moves out of its easy comps phase in April [and] in the absence of recession is unlikely to continue to trend lower,” SocGen’s Manish Kabra wrote, in a brief Thursday note.

As a reminder that no one needs: It’s all about those damn rate cuts. You know, the ones that haven’t happened yet.

On that score, Summers is a bit skeptical. Or at least about market pricing. “Markets are a bit ahead of themselves on how much cutting the Fed should do,” he remarked.

As for the people on the inside, Loretta Mester told Bloomberg that “March is probably too early for a rate [cut].”

“I think the December CPI report just shows there’s more work to do,” Mester went on. “And that work is going to take restrictive monetary policy.”